A massive Bank of America glitch now drains accounts to zero as several customers report their money disappearing.
Around 12:45 PM ET, reports of problems at Bank of America surged on Downdetector, a site that tracks service outages.
Many customers expressed frustration over being unable to view their account balances, while others who could log in were shocked to find their balances at zero.
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Citi allegedly helped Mexico launder money after the Fed dropped an enforcement action after the bank cut ties from the country.
The Federal Reserve revealed on Tuesday that it had terminated a 2013 enforcement action it filed against Citigroup, over “shortcomings in its capacity to police money laundering.”
The enforcement action, which did not carry a fine, was filed against the bank and its Banamex subsidiary over deficiencies in the firms’ anti-money laundering programs, and ordered the firm to strengthen its efforts and update regulators on its progress.
Banamex is the second-largest bank in Mexico.
The Banamex Financial Group was purchased by Citigroup in August 2001 for $12.5 billion USD.
However, Citi announced in late 2023 that it planned to split Banamex from the rest of the bank in the second half of 2024.
Reuters reports that a Citi spokesperson declined to comment on the Fed action.
This has led investors to believe that the Fed bailed Citi in an agreement to cut its ties to Mexico.
What do you think is happening here?
Leave your thoughts below.
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Market News Today – Citi Allegedly Helped Mexico Launder Money in New Scandal.
TD Bank now gets caught with illegal market manipulation and has agreed to pay over $20 million under a deal with the SEC.
Investors are calling it ‘pay to play’.
The U.S. broker-dealer unit of Toronto Dominion Bank (TD Securities USA) has agreed to pay more than $20 million to resolve allegations of manipulating the U.S. Treasuries market.
This settlement comes as part of an agreement with U.S. authorities, concluding a lengthy investigation, per Reuters.
In a court filing on Monday, TD Securities admitted to engaging in spoofing practices within the U.S. Treasuries market as part of a deal with the U.S. Justice Department.
The firm also settled related civil charges with the Securities and Exchange Commission (SEC).
Additionally, the bank faced charges for not properly supervising its former head of the U.S. Treasuries trading desk.
From April 2018 to May 2019, a former employee manipulated the U.S. Treasury cash securities market by placing orders he had no intention of executing, a tactic known as “spoofing.”
This practice aims to create a misleading impression of market demand.
U.S. regulators have taken a strong stance against spoofing, which is designed to distort market activity.
However, the criminal bank has now been let go off what investors deem as ‘easily’.
Under the terms of TD’s agreement, the Justice Department will refrain from prosecuting the firm as long as it adheres to the three-year agreement and implements significant compliance improvements.
The DOJ decided not to appoint a third-party monitor for compliance, based on the company’s efforts to address the issues.
As part of the settlement, TD Securities will pay a $12.5 million criminal penalty related to civil investigations by the SEC and the Financial Industry Regulatory Authority (FINRA).
This amount is in addition to an approximately $9.5 million criminal penalty outlined in the agreement.
The bank will also compensate victims with $4.7 million and forfeit $1.4 million.
This settlement comes at a time when the Canadian bank is reportedly on the verge of pleading guilty to separate charges concerning its U.S. retail bank’s alleged failure to prevent money laundering linked to Chinese crime groups and illegal fentanyl sales, as reported by the Wall Street Journal last week.
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Wells Fargo now faces a major lawsuit for cheating customers, after it underpaid clients to ‘enrich itself’ at the expense of others.
A class-action lawsuit filed on Tuesday accuses Wells Fargo of underpaying interest to clients participating in its cash sweep program, claiming the bank benefitted at the expense of its customers.
The lawsuit, brought by plaintiff Darren Cobb in the U.S. District Court for the Northern District of California, alleges that Wells Fargo breached its fiduciary duty, acted unfairly, violated contractual obligations, and engaged in unjust enrichment.
Cobb asserts that the bank undercompensated its customers in violation of its responsibilities, thereby enriching itself.
According to the complaint, Wells Fargo failed to provide a reasonable interest rate on customer cash, instead offering minimal rates while profiting significantly from rising interest rates.
The lawsuit highlights that customers in the cash sweep program received only 0.15% interest throughout much of 2023, despite short-term U.S. Treasury Bills yielding around 5.25%, creating a substantial disparity.
The complaint also notes that some account holders received just 0.02% on their cash balances.
In a typical cash sweep program, a brokerage moves uninvested cash from accounts into interest-bearing accounts.
The lawsuit claims Wells Fargo uses these funds to generate significant profits by earning more interest than it pays to clients.
It contrasts Wells Fargo’s practices with those of Fidelity, which reportedly transfers uninvested cash into a money market fund earning approximately 5%.
Wells Fargo declined to comment on the lawsuit, which follows a previous legal action filed last month by a wealth management client.
The bank has faced regulatory scrutiny for its interest rate practices in cash sweep accounts.
Last fall, it revealed that the Securities and Exchange Commission (SEC) was examining its cash sweep options for advisory clients.
In July, during an earnings call, Wells Fargo announced plans to raise interest rates in its cash sweep program, a change expected to reduce the bank’s earnings by around $350 million annually, aimed at aligning rates more closely with those offered in money market funds.
The recent quarterly report from Wells Fargo disclosed details about the SEC investigation, indicating that discussions regarding potential resolutions are ongoing.
The bank is not alone in facing scrutiny; other financial institutions, including Morgan Stanley and LPL Financial, have also encountered class-action lawsuits related to their cash sweep policies.
This new lawsuit seeks damages for the plaintiff and other affected customers, including restitution and the return of profits earned by Wells Fargo, along with prejudgment interest, attorney fees, and additional relief.
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Market News Today – Wells Fargo Now Faces A Major Lawsuit For Cheating Customers.
US banks now hold 7x more unrealized losses than during the 2008 financial crisis, according to fresh data from the FDIC.
The FDICreported that unrealized losses on securities totaled a whopping $516.5 billion, which was an increase of $38.9 billion from the previous quarter.
This increase was largely due to higher losses on residential mortgage-backed securities, which were affected by rising mortgage rates, per the report.
FDIC-insured institutions reported a net loss of $32.1 billion in the fourth quarter of 2008 ($12.1 billion during the 1st) — demonstrating just how overleveraged institutions have gotten today.
The banking industry also reported total assets of $24.0 trillion in the first quarter 2024, an increase of $291.2 billion (1.2 percent) from fourth quarter 2023.
The quarterly increase was mainly due to higher balances in trading accounts (up $176.1 billion, or 23.2 percent), cash and balances due from depository institutions (up $79.0 billion, or 2.8 percent), and securities (up $39.9 billion, or 0.7 percent).
Alarmingly, the number of banks on the FDIC’s “Problem Bank List” increased from 52 to 63.
Total assets held by problem banks also rose $15.8 billion to $82.1 billion.
Problem banks represent 1.4 percent of total banks, which is within the normal range for non-crisis periods of 1 to 2 percent of all banks, per the FDIC.
However, the growing number of problem banks and unrealized losses points towards a shaky financial system.
In 2008, the economic consequences forced people to foreclose their homes, jobs were lost, and retirement savings were completely wiped out.
The social implications the collapse created put families on the street and triggered severe community strain.
The crisis affected economies worldwide, leading to global slowdowns and increased economic inequality in many regions.
Industry experts such as Robert Kiyosaki and Grant Cardone have warned that the people are going to experience a system crash unlike anything ever seen before.
But I’m curious to know what you think — leave your thoughts below.
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